News story

£7m boost to heat industry innovation

Government competition to boost innovation in the heat industry, drive down energy bills and cut carbon emissions in the UK.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

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Super insulated pipes, advanced algorithms and heat recovered from industrial waste are among the winning ideas in a million pound government-run competition to drive down energy bills and boost low carbon heat supplies in the UK.

Energy and Climate Change Secretary Ed Davey is set to officially unveil the 17 winning entries at the Association for Decentralised Energy Parliamentary Reception this afternoon (20 January). The winners are spread across the country, from a project combining solar and heat pump technology in Exeter, to a scheme trialling super insulated pipes in West Cumbria. The projects will share a prize pool of £1 million to carry out feasibility studies, before up to 10 of the best projects bid for a share of £6 million to fully implement their plans.

The competition will help to stimulate innovation in heat network technologies and bring the UK a step closer to generating 14% of heat demand through heat networks by 2030, while reducing carbon emissions and cutting bills for consumers. It is also an opportunity to create jobs and growth in the sector, with the industry expected to see up to £800 million worth of new capital investment over the next ten years.

Energy and Climate Change Secretary Ed Davey said:

“This competition is all about supporting innovation and progress in the heat industry so we can heat more homes across the UK for less, while at the same time improve energy efficiency and cut the UK’s carbon emissions.

“More support for local heating projects will also give jobs in the sector a huge boost, with the value of the district and heat network market expected to rise to around £530 million this year.”

In addition to this competition, over the past year, through the Heat Network Delivery Unit funding scheme, the government has also awarded almost £7 million to local authorities across the country to help develop local heat networks. As a result, there are now around 2,000 heat networks in the UK, supplying local, renewable heat to 210,000 homes and 1,700 commercial and public buildings. A further 150 schemes are known to be under development by local authorities across the UK. Successful bidders for the fourth round of this scheme will be announced in March.

ENDS

Notes to editors

• Heat networks supply heat to a number of buildings or dwellings from heat generated at a central source and supplied through a system of insulated pipes. Heat production at this communal, rather than individual scale, is more energy efficient, delivers carbon savings, and can reduce consumer bills.

• The Government’s Heat Network Delivery Unit was established in September 2013 with an initial £7 million fund to promote heat networks. Grant funding is accompanied by support from experts in the unit to assist local authorities in developing investment grade proposals for heat networks.

• A total of 57 applications were received from 39 organisations and were reviewed by a panel of engineering, and commercial experts with significant experience in heat networks development. Bids were assessed against a range of criteria including technical feasibility, commercial viability, future carbon saving and social benefits.

• Grant offers are made subject to compliance with state aid regulations.

• Successful bidders: London Borough of Islington, Greenfield Energy Ltd, Guru Systems Ltd, Sustain Ltd, PassivSystems Ltd, Zero Carbon Future, Clean Energy Prospector Ltd, Barden Energy, BRE, Geothermal Engineering Ltd, University of Warwick, Cofely Energy Services, Sycous Ltd, Cambridge Heat Transfer Company, C-Tech Innovation Ltd, Eon Energy Solutions Ltd.

• An estimated 14% of UK heat demand could be cost effectively met by heat networks by 2030 and around 43% by 2050. A report by the Committee on Climate Change agreed with DECC that heat networks can play an important part of the overall plan for lower carbon heating in the decades ahead. There are currently approximately 2,000 heat networks in the UK, supplying heat to 210,000 dwellings and 1,700 commercial and public buildings. A further 150 schemes are known to be under development by local authorities across the UK.

• The value estimate of the district energy market in 2015 is taken from the September 2013 BSRIA report ‘UK District Energy 2013 Summary of Key Findings by Henry Lawson’.

• The portfolio of HNDU projects alone could represent between £400 million and £800 million of capital investment opportunity over the next ten years on an assumption of 25% to 50% of current projects coming to fruition (ref ‘Delivering UK Energy Investment: Networks, January 2015)

Published 20 January 2015